Posts dealing with the 8(a) business development program, including 8(a) admissions and eligiblity, requests for reconsideration, ongoing eligibility and compliance, and related matters.
SBA 8(a) mentor-protege joint ventures suffer from inadequate oversight and may not adequately benefit 8(a) protege firms, says the SBA Office of Inspector General. In a recently-released report, the SBA OIG criticized the SBA’s oversight of 8(a) mentor-protege joint ventures, finding that there is no way to ensure that 8(a) protege’s substantially benefit from the 8(a) mentor-protege joint venture program.
Some highlights from the 37-page report follow.
8(a) mentor-protege agreements cannot be protested by competitors, according to a recently-issued decision by the SBA’s Office of Hearings and Appeals. In Size Appeal of Professional Performance Development Group, Inc., SBA No. SIZ-5398 (2012), SBA OHA held that the SBA’s decision to approve an 8(a) mentor-protege agreement is outside the scope of the SBA size protest process.
Indian tribes, their holding companies, and companies owned by those holding companies are entitled to broad exceptions from the ordinary SBA affiliation rules, according to a recent SBA Office of Hearings and Appeals size appeal decision.
SBA OHA’s decision in Size Appeal of Roundhouse PBN, LLC, SBA No. SIZ-5383 (2012), holds that the SBA cannot use non-applicable affiliation rules to circumvent the regulatory exception from affiliation between tribal companies. In its ruling, SBA OHA also sidestepped an interesting tribal size question: did Congress truly intend for some tribal companies to be “small” for 8(a) program purposes, but “other than small” for all other government contracts?
As you can probably tell, the Roundhouse PBN case is not your run-of-the-mill SBA OHA size appeal decision, meaning a slightly longer-than-normal blog post is in order. Let’s dive right in.
The good news for 8(a) Program participants (and applicants) is that the United States District Court for the District of Columbia ruled earlier this month that the 8(a) program is constitutional as a whole. The bad news is that the same court found the 8(a) Program unconstitutional as applied to the plaintiff’s specific industry, military simulation and training.
For disadvantaged companies in the military simulation and training industry, the court’s decision in Dynalantic Corporation v. United States, No. 95-2301 (2012) is a major setback. Already, the DoD has apparently suspended 8(a) contract awards under the Simulation, Training and Instrumentation Acquisition Center in the wake of the court’s ruling. For 8(a) companies in other industries, the critical question now is what impact–if any–Dynalantic will have on 8(a) awards in other industries.
The Department of Defense has apparently suspended all 8(a) contract awards under the Simulation, Training and Instrumentation Acquisition Center in the wake of a federal court decision issued earlier this month.
In a press release, leaders of the Native American Contractors Association and the United States Hispanic Chamber of Commerce blasted the DoD for overreaching in response to Dynalantic Corporation v. United States, No. 95-2301 (2012), in which the United States Court of Appeals for the District of Columbia upheld the constitutionality of the 8(a) Program as a general matter, but found that the 8(a) Program was unconstitutional as applied to the plaintiff’s specific industry, military simulation and training.
I’ll have much more on Dynatlantic and the fallout from the court’s decision after the Labor Day weekend. Unfortunately, for 8(a) companies–especially those doing business with DoD– the holiday weekend begins on a very ominous note.
The 8(a) program regulations require the disadvantaged individual upon whom 8(a) program eligibility is based to manage the firm on a full-time basis, during normal working hours of firms in the same or similar line of business. When 8(a) program applicants learn about 8(a) program’s “full time devotion” requirement, many ask: “can I work a second job?”
Maybe. As seen in a recent decision of the SBA Office of Hearings and Appeals, an 8(a) program applicant may be able to engage in outside employment–even a second full-time job–so long as the applicant can demonstrate that the outside employment will not interfere with the applicant’s ability to manage the 8(a) firm full-time during normal working hours.
Agencies have broad discretion when it comes to issuing 8(a) sole source contract awards. Although a procuring agency must provide the SBA with some justification as to why it selected a particular 8(a) company for a sole source contract, that justification can be very brief. And, as the GAO held in a recent bid protest decision, an 8(a) sole source contract justification need not explain why the 8(a) awardee was superior to another 8(a) company interested in the same contract.